Terra (LUNA) Staking Guide

This guide will give you a quick overview of Terra and how to stake your LUNA tokens.

Last updated on May 14, 2022

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Terra is a blockchain protocol that uses fiat-pegged stablecoins to power price-stable global payments systems. Built on the Cosmos SDK, Terra aims to be "programmable money for the internet" with its native stablecoin UST and the LUNA governance token. As a "Layer 1" blockchain, the team behind Terra has struck up multiple partnerships to integrate blockchain functionality in every-day payment solutions.

Terra automatically adjusts stablecoin supply based on its demand to keep the one-to-one peg. By incentivizing LUNA holders to swap LUNA and stablecoins at profitable exchange rates, the protocol can either expand or contract the stablecoin supply to match demand. LUNA holders are also able to submit and vote on governance proposals, giving it the functionality of a governance token.

Why should I stake my LUNA?

Staking your LUNA helps secure the Proof-of-Stake (PoS) network. Further, most PoS blockchains are initially inflationary in nature, so staking your LUNA prevents you from getting inflated out of your position as you earn rewards for helping secure the network and validate transaction.

What happens when I stake my LUNA?

As Terra utilizes a Delegated Proof-of-Stake consensus mechanism, you can delegate an amount of ATOM you hold to a "validator", making you the "delegator". Validators on the Terra blockchain (and most other PoS blockchains) validate the network by approving transactions. The more LUNA a validator holds the more powerful they are and the more "vote" the have in the network, which allows them to validate more transactions, thus earning more rewards. By delegating your LUNA, you trust the selected validator to be a good network participant. From the earned rewards, the validator gives a certain percentage (stipulated by the network) back to the delegators that have delegated (staked) their LUNA to them.

That's how you earn rewards.

How much can I earn from staking my LUNA?

At the time this post was published, the APY (Annual Percentage Yield) was: 3.68%.

For the most up-to-date rewards rate, you can check the Steakwallet app or visit a website such as Staking Rewards.

What is the minimum amount of LUNA I can stake?

To stake LUNA, a minimum of 0.05 LUNA is required. This ensures you can stake and also pay the Terra network transaction fee. You should always make sure to have enough LUNA available to pay for network fees, as all blockchain interactions require them (such as sending a transaction, staking, unstaking, or interacting with any other dApps).

How do I stake my LUNA?

When you stake your LUNA, you are able to choose how much of your LUNA you want to delegate to the validator. You can stake any amount of LUNA, for which you immediately start accumulating rewards. You will not be able to use the staked LUNA for anything else or sell them during the period the LUNA are staked.

Make sure you have enough LUNA in your wallet to pay for network transaction fees.

Please note: You will need to manually claim your rewards and re-stake them to earn the maximum possible rewards. More on claiming your rewards below.

Which validator is my LUNA staked to?

Currently, if you stake your LUNA with Steakwallet your stake gets delegated to validators run by Figment. Figment is a reliable partner and one of the most trusted validator providers in the industry. We plan to offer more optionality in the future.

How do I unstake my LUNA?

When you unstake your LUNA, you can decide on the amount you want to unstake. Once you confirm the amount, your LUNA will now be "unbonding" from the validator. This process takes 21 days, during which your unstaked LUNA is not earning any rewards. When you unstake your LUNA, any unclaimed rewards you may have will be auto-claimed.

Please note: When you unstake LUNA from any given validator, you can unstake at most 7 times in a 21 day period. If you try more, the unstake will fail. You must wait for one of the previous unstaking entries to expire.

When will I start earning rewards?

When you start staking your LUNA and the delegation is confirmed, you will start earning rewards on the staked amount instantly.

How do I claim my staking rewards?

On the Terra network, you need to manually claim earned rewards. Unless you have enough LUNA to cover network fees for claiming your rewards, you will need to wait until you have earned enough LUNA to cover the network fee.

On Steakwallet, there is a "Claim Rewards" button right below your staked balance that shows your earned rewards available for claiming.

Does Steakwallet take a cut of my rewards or charge a few?

No. Steakwallet never charges a fee on your staking rewards.

Is LUNA staking safe?

Given that you always maintain custody of your assets (as Steakwallet is non-custodial), you always remain in full control.

While staking LUNA is relatively safe, and while we work together with Figment as they are one of the most reliable validators in the industry, there's always a risk of slashing. If a slashable event happens, you can lose a portion of your staked ATOM. However, this has not happened on the Figment validator in all its years of existence.

There are two ways you can be slashed:

  1. If you delegate to a validator that is offline for over 20 hours (assuming a 7.22s block time), you will lose 0.01% of the tokens you have delegated to that validator.
  1. If you delegate to a validator that signs the same block twice with the same key, you will lose 5% of the tokens you have delegated to that validator.

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The risk of loss in cryptocurrency, including staking, can be substantial and nothing herein is intended to be a guarantee against the possibility of loss. This web page and the content contained herein are based on information which is believed to be reliable and has been obtained from sources believed to be reliable, but steakwallet makes no representation or warranty, express or implied, as to the fairness, accuracy, adequacy, reasonableness, or completeness of such information. Steakwallet cannot be responsible, in any way whatsoever, for your use of the information contained in or linked from this web page. Do not rely upon any information found on blog.steakwallet.fi or support.steakwallet.fi without independent verification.
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